3D Systems (DDD -1.15%) and Stratasys (SSYS -1.60%) are slated to report their second-quarter 2020 results on Wednesday, Aug. 5. Stratasys is scheduled to report before the market open and its 3D-printing rival after the closing bell.
Investor expectations are likely low. Both companies' first-quarter results were hit quite hard by the COVID-19 pandemic, as were those of many industrial companies. Their Q2 results should be even worse since the pandemic largely affected just the last month of the first quarter.
Here's what to watch when 3D Systems and Stratasys report.
Image source: Getty Images.
Stratasys
Here are the company's results from the year-ago period and Wall Street's consensus estimates to use as benchmarks.
| Metric |
Q2 2019 Result |
Wall Street's Q2 2020 Consensus Estimates | Wall Street's Projected Change YOY |
|---|---|---|---|
|
Revenue |
$163.2 million |
$121.7 million |
(25%) |
|
Adjusted earnings per share (EPS) |
$0.16 |
($0.20) |
Result expected to flip to negative from positive. |
Data sources: Stratasys and Yahoo! Finance. YOY = year over year.
For context, in the first quarter, Stratasys' revenue fell 14% year over year to $132.9 million. Its reported loss per share expanded 900% to $0.40. Adjusted for one-time items, it posted a loss per share of $0.19, down from earnings per share of $0.10 in the year-ago period.
Along with the headline numbers, investors should focus on sales of 3D printers and print materials. Sales of 3D printers drive future sales of high-margin print materials.
3D Systems
Here are the company's results from the year-ago period and the Street's consensus estimates to use as benchmarks.
| Metric |
Q2 2019 Result |
Wall Street's Q2 2020 Consensus Estimates | Wall Street's Projected Change YOY |
|---|---|---|---|
|
Revenue |
$157.3 million |
$117.9 million |
(25%) |
|
Adjusted earnings per share (EPS) |
$0.00 |
($0.10) |
Result expected to change from breakeven to negative. |
Data sources: 3D Systems and Yahoo! Finance. YOY = year over year.
In the first quarter, 3D Systems' revenue fell 11% year over year to $134.7 million. Its reported loss per share narrowed 23% year over year to $0.17. Adjusted for one-time items, its loss per share narrowed 56% to $0.04.
Investors should focus on sales of 3D printers and print materials for the same reason mentioned with respect to Stratasys. In addition, investors should home in on whatever information management provides about sales of the company's factory metals systems. Shipments of these systems reportedly resumed in April. The company had paused shipments for several quarters in order to correct quality issues.
You should also monitor the company's cash situation. Last quarter, it burned through $20.9 million in cash and ended the period with $112.8 million of cash on hand. At that burn rate, its cash will last less than six quarters.
Finally, a top management note: This quarter will mark the first quarterly results released under 3D Systems' new CEO, Jeffrey Graves, and interim CFO, Wayne Pensky. Both execs came on board in late May. Prior to coming to 3D Systems, Graves was CEO for eight years at MTS Systems, a leading global supplier of test, simulation, and measurement systems. Pensky came out of retirement to take the interim job while the company looks for a permanent financial leader. Prior to retiring in 2017, he was a longtime CFO of Hexcel, a manufacturer of composite materials.
